IMF asks governments to spend

English Jan 18, 2021

"Spend as much as you can and then spend a little more," was the message given last night by the managing director of the International Monetary Fund at Russia's annual Gaidar economic forum.

One of the central topics of the forum, as elsewhere, was the effects of the pandemic on economies around the world. The director praised Russia for its response to COVID-19, attributing the country's rapid recovery to quantitative easing (cash injection) measures by its central bank and the Kremlin's $ 54.3 billion stimulus package.

For the rest of the world, the message was similar: "Please spend". An advice aimed at governments that work with fiat currency, but certainly not applicable to those who save in cryptocurrencies. In fact, inflation is likely to rise rapidly as more printed money increases the demand for goods and services.

Some savvy investors are already talking about the protection that cryptocurrencies offer against inflation.

Unlike fiat currency, some cryptocurrencies, such as Bitcoin, have their monetary policy determined by algorithms, which means that they remain outside the market fluctuations of fiat currencies whose monetary policy is determined by politicians, such as the real, the euro, the pound sterling or the dollar.

With governments around the world focusing their attention on launching vaccines and boosting their economies, it will be interesting to see how cryptoeconomics will react - imposing its hegemony over inferior currencies.


Morel Hernandes

Writer passionate about politics, economics, blockchain and crypto-currencies.